Post on 10-Apr-2018
8/8/2019 BT53S
1/20
10/13/2010 IDC
Copyright IDC. Reproduction is forbidden unless authorized. All rights reserved.
European Wholesale Telecoms:
Sizing the OpportunityJan Hein BakkersAngela Salmeron
James EibischEMEA Telecoms and Networking
June 30, 2010
8/8/2019 BT53S
2/20
10/13/2010 2 IDC
Agenda
Introduction
Wholesale Access Services
Wholesale Voice Services
Wholesale Data Services
8/8/2019 BT53S
3/20
10/13/2010 3 IDC
Introduction
Wholesale is an increasingly important
segment for many major operators,generating up to around 20% of grouprevenue
Regulation has put more emphasis onwholesale segment
IDC analyzed three key segments, worth$75.5 billion in revenues in 2009:
Access
Voice
Data
Total = $75.5 B
8/8/2019 BT53S
4/20
10/13/2010 4 IDC
Agenda
Introduction
Wholesale Access Services
Wholesale Voice Services
Wholesale Data Services
8/8/2019 BT53S
5/20
10/13/2010 IDC
Wholesale Broadband
Access
DSL simple resale
DSL bitstream access
Naked DSL
Wholesale fiber access
Wholesale Line Rental
Unbundled Access Full Unbundling
Line Sharing
Subloop Unbundling
Fiber Unbundling
Traditional Fixed Voice
IP Voice
Broadband Access
TV
Data services (e.g. IPVPN, ethernet services)
Wholesale Markets Associated Retail Markets
Wholesale Versus Retail
8/8/2019 BT53S
6/20
10/13/2010 6 IDC
Regulation and Broadband HaveDriven the Wholesale Access Market
8/8/2019 BT53S
7/2010/13/2010 7 IDC
Wholesale Access Status byCountry, 2009
Bubble size indicates market size in revenues
8/8/2019 BT53S
8/2010/13/2010 8 IDC
Access Market Outlook
Market contraction in retail voice
Slowdown in growth in retail broadband access
Next generation access drives wholesale broadband access
Regulation inhibits retail market for next generation access services,
...but will drive the role of wholesale in it
LLU business model will come increasingly under threatConsolidation is wild card
8/8/2019 BT53S
9/2010/13/2010 9 IDC
Access Essential Guidance
Next generation access will drive wholesale broadband access
LLU operators need to develop long term strategies
For owners of access infrastructure, wholesale should be morethan just regulatory obligation
Strong wholesale portfolio can improve position against otherinfrastructures
Wholesale services can improve business case for next generationaccess
Cost based, regulated prices improve predictability of revenue
streams
8/8/2019 BT53S
10/2010/13/2010 10 IDC
Agenda
Introduction
Wholesale Access Services
Wholesale Voice Services
Wholesale Data Services
8/8/2019 BT53S
11/2010/13/2010 11 IDC 11
Wholesale Voice Markets andAssociated Retail MarketsWholesale Voice Markets andAssociated Retail Markets
Wholesale Voice Markets Retail Voice Markets
National VoiceInterconnection Services
qTermination, transit
qTraditional voice, VoIP and mobile voiceq
National TDM Calls toFixed/Mobile National Numbers
National VoIP Calls toFixed/Mobile National Numbers
National Mobile Calls toFixed/Mobile National Numbers
International TDM Calls toFixed/Mobile Numbers
International VoIP Calls toFixed/Mobile Numbers
International Mobile Calls toFixed/Mobile Numbers
International Voice
Interconnection Services
qTermination, transitqTraditional voice, VoIP and mobile voice
q
8/8/2019 BT53S
12/2010/13/2010 12 IDC
New Wholesale Business Models
From traditional voice interconnection toinnovative wholesale IP-based services(including non-voice services)
Transition from a minute/kbps model to aconsumption/seat wholesale model(packaging of voice/data services)
Pioneering wholesale carriers aim tobecome partner of choice for managed
services
Move up the value chain
Convergence, NGN architecture,interoperability services, IPXplatform
Operational efficiencies: voicerouting; common infrastructure tosupport new IP and multimediaservices
Expansion to non-voice services.Partner of choice for managedservices at a global scale.
International partnerships (incl.traffic outsourcing) to global
carriers with scale
8/8/2019 BT53S
13/2010/13/2010 13 IDC
SWOT Analysis EuropeanIncumbents
Extensive local network andinterconnection services
State-of-the-art network and ability tointroduce innovative services
Extensive global on-net and off-netcoverage
Pressure on profitability: capex for thebuild out of new networks vsmaintenance costs for legacy networks
Large legacy customer base andrevenues to protect
Wholesale services are heavily
regulated in some instances
STRENGTHS
OPPORTUNITIES
WEAKNESSES
THREATS
Partnership, alliances for economies ofscale and improvement in cost structures
IPX platform, interconnectivity services
Development of bundles, value addedservices and voice managed services
Emerging players competing in priceand creating disruptive businessmodels
Negative impact on wholesale tariffs
Consolidation and aggressivecompetitive environment
8/8/2019 BT53S
14/2010/13/2010 14 IDC
Wholesale Voice Market Outlook
14
Wholesale voice traffic volumes will remain barely flat in 20092014
National voice traffic volume is expected to be well sustained despite the threat of alternativetechnologies (SMS, email, IM): new opportunities in remote and flexible working
Healthy growth in international wholesale voice traffic from wireless operators and voice overbroadband (VoBB) players
Pressure on voice termination rates and aggressive competition (mainly ininternational and wireless voice) will bring overall revenue down
8/8/2019 BT53S
15/2010/13/2010 15 IDC
Agenda
Introduction
Wholesale Access Services
Wholesale Voice Services
Wholesale Data Services
8/8/2019 BT53S
16/2010/13/2010 16 IDC
Data Scope of Coverage
Fixed-line wholesale data services: Capacity e.g. SDH/PDH private line, Ethernet private line,
wavelength services
Managed network services e.g. wholesale IP/Ethernet VPN
IP transit
Excluded: Non-wireline services e.g., microwave backhaul
Infrastructure e.g., dark fiber/ducts
Network outsourcing, transformation
Pure play CDN e.g., Akamai Standard reseller channel
8/8/2019 BT53S
17/2010/13/2010 17 IDC
Data Trends
Volumes and pricing High growth in volume persists, driven by Internet, video, mobile,
private networking and, in the future, cloud. Highly competitivemarket in Europe: legacy pricing down but fairly stable; Ethernetpricing varies considerably, declining strongly overall.
Migration patterns SDH to Ethernet migration in progress. Long-term migration topacket circuits. Move towards wrapping wholesale as a managedservice.
Interconnection Ethernet exchanges becoming significant. IP transit will evolve.
Supplier landscape Scale will dominate mass market but niche players will remain.
8/8/2019 BT53S
18/2010/13/2010 18 IDC
Data Market Outlook
Combination of volume increase and price decrease results in modestgrowth in wholesale data revenues overall.
Carriers should make a positive decision whether to target wholesaleactively (and so develop scale, wholesale managed services, sales marketing) or not; both are valid options.
8/8/2019 BT53S
19/2010/13/2010 19 IDC
Suggested Reading
EMEA Wholesale Access Services 20102014 Forecast and
Analysis (IDC #BT03S)
Western European Wholesale Voice Market Analysis (IDC #HP02S)
Western European Wholesale Data Services 20102014 Forecastand Analysis (forthcoming)
8/8/2019 BT53S
20/20
Jan Hein Bakkersjbakkers@idc.com
Angela Salmeronasalmeron@idc.com
James Eibischjeibisch@idc.com
Questions?